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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— Warren Buffett

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a ten year holding period for an investor who was considering Incyte Corporation (NASD: INCY) back in 2011, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 06/27/2011
$10,000

06/27/2011
$46,370

06/24/2021
End date: 06/24/2021
Start price/share: $18.58
End price/share: $86.13
Starting shares: 538.21
Ending shares: 538.21
Dividends reinvested/share: $0.00
Total return: 363.56%
Average annual return: 16.58%
Starting investment: $10,000.00
Ending investment: $46,370.36

As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 16.58%. This would have turned a $10K investment made 10 years ago into $46,370.36 today (as of 06/24/2021). On a total return basis, that’s a result of 363.56% (something to think about: how might INCY shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“If you can follow only one bit of data, follow the earnings.” — Peter Lynch